Corporate Board Diversity
As the demand for investors and other market participants for greater diversity in the boardroom, boards need to have a clear plan to meet these expectations. These efforts should not only encompass the demographic components of ethnicity and gender, but also broad categories such as the country of origin, religion and cultural background, as well as people with disabilities.
The current state of diversity on boards remains a significant concern, but it is important to realize that there are plenty of areas where improvements have been made. We believe that boards should share their views, make public their diversity composition, and go beyond the traditional pool of candidates in their search for candidates who are diverse.
The boardroom is a place where the variety of perspectives on issues that impact the business are crucial to effective governance. However, many boards are unable to accept that their diversity is restricted by their membership. This is because directors in their current positions typically seek new members from their network which could include individuals who are similar to themselves, which limits the potential for a broad and diverse pool. The challenge is to find ways to stop this cycle so that the board can make diverse appointments, not just to fulfill quotas, but because those appointments will be beneficial to the company. To help with this effort we have put together a list of best methods to increase diversity in the boardroom.